Jeff Ostrowski
Alexandra Clough
Home > Real Time > Archives > 2008 > February > 18 > Entry
Builders play the blame game
The homebuilding industry is in a steep downturn, so I attended last week’s International Builders’ Show expecting to hear mea culpas and apologies, or at least a little introspection. Instead, I heard builders blaming almost everyone but themselves for the current housing hangover.
From colder to warmer, here’s a list of the scapegoats singled out by builders:
Decades of tax breaks for homeownership, federally backed mortgages and other policies friendly to the housing industry aren’t enough. The builders kicked off the show by saying they’ve stopped contributing to Congressional candidates because Washington just hasn’t done enough to bail out homebuilders.
I’ve heard nary a shred of proof that the media affects home prices, and I’ve never seen a study showing how much a headline makes prices rise or fall, but don’t let that get in the way of some easy scapegoating. I listened to Bob Schultz, a prominent sales trainer based in Boca Raton, on separate days tell big audiences that “bad news sells newspapers,” hence the media’s anti-housing bias. Maybe, just maybe, the media has been reporting that prices are going down because prices are going down? Nah, impossible.
We’re getting warmer. National Association of Home Builders Chief Economist David Seiders bashed subprime lenders for playing fast and loose, and he also criticized federal banking regulators for not stopping them. Regulators “were really behind the curve, and I fault them for that,” Seiders said. Of course, he didn’t mention that builders themselves have become significant lenders. Pulte, for instance, arranges loans for an astonishing 90 percent of its buyers — three to four times the capture rate of a typical real estate broker with a mortgage arm.
Permalink | Comments (7) | Categories: Jeff Ostrowski
Comments
By Michael Fink
February 18, 2008 11:10 AM | Link to this
“Maybe, just maybe, the media has been reporting that prices are going down because prices are going down? Nah, impossible.”
Stop the crazy talk Jeff, you know that the PB Post and the SS are directly responsible for the global MTG meltdown, right? And for the record rates of foreclosures seen across the country? As a matter of fact, if you would just post some rosy articles again, this entire global finance nightmare would come to an abrupt end. :)
“National Association of Home Builders Chief Economist David Seiders bashed subprime lenders for playing fast and loose, and he also criticized federal banking regulators for not stopping them.”
And this guy never mentions the other side of that coin. Of course, he is correct, but what he is not saying is that had there NEVER been fast and loose lending, the market NEVER would have taken off like it had. The median home price in PBC would be around 200-250K, and none of this boom time craziness would have happened. So, although he is correct, he neglects to point out that much of the builders profit was taken on the backs of the MTG blowup.
By Rawls Rawks
February 18, 2008 11:18 AM | Link to this
I miss Linda Rawls. :(
By steve
February 18, 2008 1:11 PM | Link to this
I am still waiting for Minto and Olympia to be investigated.Look at the homebuyers that used their mortage arm Homebuyers Financial..is it a coincidence that most are now selling/foreclosing etc.Look at all the option pay ARMS /adjustables that they “put” people in to get the deal done.Look at all the empty homes,renters,short sales in that development.Now they have a serious crime problem that has not been reported while Minto tells security to “play it down’ as not to hurt sales…A mess…it would be nice if people could get an Honest story of what is happening.The unethical at best behavior of this builder to “sell” many uneducated or Out of town buyers….I understand that the buyers have to do their due diligence..but isnt it about time the PRESS does some investigating…to help the financially uneducated?It would truly open the eyes of the “Kool aid ” drinkers and keep some people out of a mess.Please start investiagting now..it is only going to get worse
By Curious
February 18, 2008 7:37 PM | Link to this
Simple psychological syndrome:
It didn’t happen!
It’s not my fault!
He/she caused it!
Everyone else does it!
By fromfl
February 19, 2008 11:13 AM | Link to this
There is no one cause to the current housing crisis. But, as I have stated before in this blog, the downturn has been based mostly on market psychology, not fundamentals. The fundamentals are not much different from the boom, with low unemployment, robust spending and job creation, and low interest rates. You in the media cannot be held harmless from playing a big role in continuously, loudly and hysterically reinforcing the negative psychology, alway using terms like “plunging” when describing a 2 or 3% decrease, or “meltdown” because people now actually have to qualify for mortgages with real income. Or reporting month after month that sales are down 20%, 30%, whatever, not clearly stating that these are year over year declines, the same 20%, not 20% per month. Unfortunately, most Americans don’t read past the headline. Most unsophisticated readers see that as 20 or 30% PER MONTh declines. So really, stop the fake naive innocence.
Although this doesn’t only apply to the Palm Beach Post, as this is a nationwide issue, you guys are worse than all the other major Florida newspapers (including central and north Florida).
By $offer$
February 20, 2008 12:06 AM | Link to this
I say most buyers will be able to buy with cash this time next year. Places so cheap you wont need a mortage.
By DRIVE BY MEDIA VICTIM
February 20, 2008 1:00 PM | Link to this
After a four year News Media gang-bang of the housing market what did you expect! See how many ways blood thirsty reporters at The Palm Beach Post slammed real estate:
1.Routinely MASQUERADING FORECLOSURE and distressed property consultants as impartial real estate experts whose always negative comments became a self full-filling prophecy!
2.Quoting Wall Street brokerage economists whose only interest was to kill the housing market and drive investor $$$ back into stocks.
3.Targeting Florida with completely fabricated horror stories about 100,000 condo’s being built in Miami when condo construction starts in all of Miami-Dade County never exceeded 6,000 a year!
4.Constantly telling readers that mortgage interest rates were rising when interest rates were actually FALLING.
5.Hyping foreclosure statisitics but NEVER telling readers that nearly 50% of Florida homes DON’T even have a mortgage!
6.Deliberately reporting and misrepresenting much worse foreclosure stats from Arizona and Nevada as Florida’